The short message platform Twitter announced last week that the board of directors had accepted an offer from billionaire Elon Musk to take over the company. The deal, valued at around $44 billion, would earn Twitter shareholders $54.20 per share if they approve the transaction. This would see the company returning to private hands after nearly nine years since its 2013 IPO.
The relationship between the fashion industry and Twitter
Twitter is not a high priority in the fashion industry and therefore not as heavily used by brands compared to the meta-platforms Facebook and Instagram. A survey released in 2021 by US market research firm NPD Group focused on the influence of social media on sales in the fashion industry and found that 41 percent of fashion enthusiasts preferred Facebook to discover fashion brands, while 35 percent preferred Instagram used. More than half of respondents indicated that content on Facebook and Instagram influenced their purchase of products.
Factors contributing to these preferences may include that Twitter is roughly 56 percent a male-dominated platform, according to Statista’s findings, and CNBC has reported that men are less inclined to shop online than women. The microblogging network is also not as accommodating when it comes to images and offers poorer opportunities to share them. Photo-based Instagram, on the other hand, attracts a larger percentage of young people. The Pew Research Center found that 71 percent of 18-29 year olds say they’re active on the platform, compared to just 40 percent in the same age group on Twitter. Facebook and Instagram simply have a broader network with billions of monthly active users compared to the 330 million who are active on Twitter.
While Twitter generates the least traffic for those looking for fashion inspiration, the Cotton Lifestyle Monitor found, some fashion brands have warmed to the network during the pandemic, particularly those in the luxury sector. Brands like Balenciaga and Hermès have innovated on the platform with experimental live streams or virtual experiences of their runway shows. Twitter’s marketing side boasted an audience of 36.8 million people at a Louis Vuitton Fall/Winter 2021 men’s show – a success that may have been attributed to the show’s collaboration with K-pop music sensation BTS. Twitter’s demographics are more educated, affluent, and mostly American—and could therefore be attractive to these brands. It is also comparatively cheap when it comes to advertising: it has the lowest contact prices per thousand users.
How Musk’s acquisition could change this new dynamic in fashion advertising
Musk paved the way to this deal by quickly becoming Twitter’s largest shareholder and then bidding for board membership before deciding against it, concluding that only then would he make any changes to the platform whatever he deems necessary when in complete control. The board initially looked for ways to defend itself against his actions, but then relented to avoid litigation.
While Twitter isn’t a profitable company — it made a loss of $221 million last year — it’s an influential company. Many active Twitter users are major media figures, celebrities and politicians, with former US President Barack Obama’s profile having the highest number of followers. The Pew Research Center found that about half of Twitter users regularly consume news content, and the platform is often referred to as a ‘de facto public space’.
Following the news that the board had accepted his offer, the SpaceX founder and Tesla CEO stated: “Freedom of expression is the foundation of a functioning democracy and Twitter is the digital marketplace where important issues affecting the future of humankind are debated Musk, a self-proclaimed “free speech absolutist,” has opposed Twitter’s moderation efforts — attempts to curb disinformation, curb harassment, prevent violence, and create a generally friendly environment on the platform. It’s unclear where his limits lie or how he will define legal free speech, aside from his tweet from last week: “I hope even my worst critics stay on Twitter because that’s what free speech is.” means.”
If he allows the platform to become too much of a lawless space, brands could reconsider their participation. Companies like Adidas, Levi’s, Patagonia and VF Corporation paused their Facebook ads in 2020 as part of the Stop Hate for Profit boycott because the algorithms continued to encourage hate speech and misinformation. The campaign was short-lived and didn’t impact Facebook’s ad revenue that year, according to the New York Times, but Twitter might fare less well under the same circumstances.
Musk may not care. It could do without advertising altogether, relying on a subscription model that Twitter has already experimented with. “Anyone who signs up for Twitter Blue and pays $3 a month should get an authentication tick,” he tweeted. “And no ads. Corporate power to dictate policy is greatly enhanced when Twitter depends on advertising money to survive.” Former Twitter CEO Jack Dorsey echoed the sentiment. “Twitter as a company has always been my only problem and my biggest regret. It was dominated by Wall Street and the advertising model. Reclaiming it from Wall Street is the right first step,” Dorsey said of the network he co-founded, calling it “the closest thing to global consciousness.”
Other potential changes Musk has publicly expressed interest in include creating a more transparent, open-source algorithm, adding an editing feature for published tweets, and authenticating human users to rid the platform of spambots.
This item was previously on FashionUnited.uk